Calculating the cost of a Learning Management System can be a complex task.
According to Capterra, “People spend 59% more than expected on their Learning Management System”. Yes, LMS costs can greatly vary depending on the users’ needs and the provider’s goals and budget. However, building custom LMS software can offer more clear pricing options.
To understand why e-learning courses have gained so much traction, we first need to see what they are and how did we get here.
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What are LMS platforms?
LMS is the abbreviation of Learning Management System. LMS platforms are software that helps manage the training process and learning experiences in a company, school or institution. It’s like a personalised virtual university that offers students access to training materials like online courses and quizzes and allows them to earn qualifications.
We always preach to embrace technology with every given opportunity. Through the last couple of years, we witnessed a massive migration towards mobile learning. It’s true that a major health crisis pushed us a little harder than expected towards digital solutions, but the idea is the same: digital solutions are here to stay.
How did LMS platforms become so popular?
In 2020, the traditional educational system (among many others) was put on hold. The world needed to experiment with a totally different, unconventional way of learning: remote, through digital tools.
We have all experienced remote learning and communicating for years now. The demand for online video conference tools exploded – Zoom had an almost 400% increase in sales during the first months of the pandemic.
Schools, universities, and companies needed to find solutions to keep the learning process going. Learning Management Systems (LMS) became one of the most requested digital platforms during the last couple of years. Popular LMS platforms are making the market grow so much that by 2026, its value is expected to reach $7.570 million.
So, if you’re thinking of jumping into the LMS world and you already decided that a custom-developed learning platform is your choice, you’re probably looking into more details about how much it will cost to develop a custom e-learning platform.
In this detailed article, we’ll explain how much it costs to develop basic LMS functionalities.
Learning Management System Cost
By this time, you are probably wondering what goes into the development price? So before we dive into the exact LMS costs, let’s talk a little about the general aspects of setting development costs.
Each development agency keeps in mind these aspects when it sets its rates:
Business Analysis Costs
Not every business is the same and people usually need advice on what they will develop.
During this step, a business analyst will understand your business model to its core and will provide advice based on your needs.
Here essential aspects of the digital product will be defined: custom vs off-the-shelf solution, mobile, web or progressive. This helps us set clear expectations from both sides.
Software Architecture Cost
A software architect will assist the client team and the BA in deciding the system’s structure development. He will choose the right cloud systems suitable for the client’s needs, will design the database structure and data flows, and will draw mock-ups for the product.
This will help the development team have a clear understanding of the technical solution they need to develop.
Design (UX/UI)
A smart digital product is nothing without a smooth user experience (UX) and an appealing interface (UI). As we all know, a great UI can make or break your product, especially if it is a business-to-customer app.
A web designer will craft the look and feel of your e-learning platform, so it matches your audience and vision.
Development
The development costs will be given by the complexity of the project. Developing a learning management system from the ground up, will require at least a couple of engineers, testers and probably a project manager.
Development costs are set per hour, based on the experience of the resources involved in the project and the complexity of the app.
For example, a web app that uses AI modules will need a lot more hours of research and development compared to a regular app, thus raising the costs for this step.
Targeted Platform
Another aspect that could add more time and money needed for your idea to come to life, might be the type of platform you intend to build the application for.
People know that mobile devices are dominating the user’s behaviour and many looks for either a mobile app version or alternatives that will make their web apps also suitable for mobile devices.
That being said, your product can be:
- web only (also can be updated to be a Progressive Web App)
- mobile-only
- web and mobile
- all mobile (iOS + Android)
These requirements are usually dictated by your business model, but a business analyst can also assist you in making the best picks for the future of your company.
Support Cost
Similarly, to a product that comes with a warranty that guarantees you’ll get free replacements or repairs for a certain period of time, the same applies to software.
Most agencies will include a “default” support period where you can request small updates and fixes for your new digital platform, free of charge.
Usually, this LMS pricing cost is included in the overall price of the development.
Cloud Hosting or Internal Infrastructure Cost
Based on preferences, a web app can be stored internally or in the cloud. Each type of infrastructure hosting will add recurring costs. Software agencies have agreements in place with service providers – for example, we use Microsoft Azure, which offers them good deals for different types of hosting.
The infrastructure cost varies based on the needed reach for the platform (worldwide vs nationwide) and the amount of content uploaded.
An e-learning platform will need more storage because it has large amounts of video content to host.
Now that we have talked about general aspects that define the cost, the pricing model is actually defined per hour, Based on the type of engineers required to develop it.
Engineers’ and Developers’ Cost
- Technical business analysts and software architects: 50-80 EUR / hour
- Designers: 30-50 EUR / hour
- Developers: 35-55 EUR / hour
- Testers: 30-50 EUR / hour
Now that we have agreed that the cost is per hour, it’s important to say that the final estimation is given by the features you want to be included in the app.
Down below, we broke down the general features an LMS has into two categories: basic and add-ons. The basic features are the must-haves, in order to have a functional learning management system. While the add-ons are “nice to have” features that your students will appreciate and might help you stand out.
There isn’t a definitive answer when it comes to estimating a learning management system cost. Each business is unique in its own way: it has a certain innovation culture, business model and goals.
We look into each individual aspect that makes your business one of a kind and we adapt our technological knowledge to your use.
When it comes to the actual cost of LMS, this article and our free downloadable checklist should give you a rough estimate. It will give you a good starting point to plan the development of your custom LMS.
Keep in mind that each software agency is different and based on aspects like location, seniority or technologies used, prices will be different.
Download our free pricing guide down below! In the document, you’ll find a complete breakdown of basic and advanced functionalities, the time needed to develop each one and a cost estimate.
Download our guide and evaluate how much your ideal LMS could cost and how long the development would take.
